Mortgages

When
you first take out a mortgage you start on an initial interest rate,
which usually lasts for one to five years, before moving on to the
lender's standard variable rate. You can choose either a fixed- or
variable-rate deal.

Which
one you should choose depends on whether you think your income is
likely to change, whether you prefer to know exactly what you will be
paying each month, or if you could cope if your monthly payments went
up.

Types of mortgage deal

Below
are the main types of mortgage deal. Whether a particular deal offered
by a lender is available to you could depend on whether you are a
first-time buyer, moving house or changing your mortgage without moving
(remortgaging).

We believe you should seek professional advice before you select a mortgage. The Which? Group offers an independent mortgage advice servicethat looks at every mortgage from every available lender.

Discounted
deals can be "stepped" so, for example, you might take out a
three-year deal but pay one rate for six months and then a higher rate
for the remaining two and a half years.

Some variable rates have a 'collar' - a rate below which they can't fall - or are capped at a rate they can't go above.

Fixed-rate mortgages

You pay the same interest rate for the whole deal, regardless of interest rate changes elsewhere.

Other features to consider

Cashback

Some
mortgage deals give you cashback when you take them out but you should
factor this into the overall cost of the deal before choosing one of
these products.

Flexibility

Flexible
mortgages let you over and underpay, take payment holidays and make
lump-sum withdrawals. This means you could pay your mortgage off early
and save on interest.

Some conventional deals also let you overpay by a certain amount each year, typically 10%.

Other
types of flexible mortgages include offset mortgages, where your
savings are used to offset the amount of your mortgage you pay interest
on each month.

And
current account mortgages combine your current account, savings and
mortgage into one so all your credit balances offset your mortgage debt.

Flexible
deals can be more expensive than conventional ones so make sure you
will actually use the features before taking one out.

They
can be particularly worthwhile for higher-rate taxpayers because, as
you don't actually receive the interest on your savings, you don't pay
any tax on it either.

Mortgage advice

Smart Estates UK LTD does not offer mortgage, advice we have partnerships with many mortgage advisors from which we can get our customers sound advice

We believe you should take independent advice before choosing a mortgage.

If
you're looking to find out what your repayments would be at different
interest rates, or want to get an idea of how much you could borrow, try
using the mortgage calculatorsoffered by many Mortgage Advisers.

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